|
The CME® Lean Hog Index is a two-day weighted average of cash prices. For contracts through February 2003, these cash prices are the actual base costs at 51-52% lean of the hogs that were slaughtered that day. These prices are available in USDA Report LM_HG213-National Daily Base Lean Hog Carcass Slaughter Cost. Beginning with the April 2003 contract, the cash prices used in the Index will be the average net prices at the average percent lean for slaughtered hogs. These prices are available in USDA Report LM_HG201-National Daily Direct Hog Prior Day Report-Slaughtered Swine. Each packer reports this base cost and average net price, the number of hogs slaughtered and the average carcass weight to the USDA. The USDA then calculates an average base cost and net price, weighted by the number of hogs slaughtered and the average carcass weight. This weighting allows each price to be represented in proportion to the number of hogs sold so that the Index better represents production patterns and prices received by producers. On the day after slaughter, the USDA releases the weighted average base cost and average net price, the total number of hogs slaughtered and the average carcass weight. Because the information is reported the day following the actual slaughter, the Index itself has a lag.
See CME Rule
15203 for the specific formula used in calculating the Index.
|
 |
 |
